Digital debt is not new. The inability or choice by organizations not to take digital action that would benefit their business through upgrades or advancement early on, leaving them with greater issues at a later stage is common in business. It’s the same as neglecting the small ‘tick’ sound your car makes, by the time the car stops running, you learn that it could have been fixed at the first stage when you heard the ‘tick’ by replacing a small, cheap part, by when you ignore it, you need a whole new system.
As the pandemic took hold and forced nations into lockdowns, businesses that were not digitally prepared suffered the most. From restaurants to retailers, businesses scrambled to improve their online services, secure payment gateways, and find ways to meet customer demands. For those businesses that weren’t already prepared with an online presence, the threat of failure was written on the wall.
However, many businesses have pulled through the seemingly worst of the threat. You need to be aware of the changes that the pandemic has caused and the fundamental shifts that are now considered part of the ‘norm’ of everyday life. From home delivery of groceries to access to all government and banking services from home, people now demand that online be the new normal.
Business Objectives and Processes – A Disconnect
Larger companies often find that they implement processes that create layers of administration and slow work. A 2017 study by McKinsey found that about 30% of frequent tasks could be automated in the majority of jobs and that 30% of those work hours could be automated by 2030. This automation would allow people to work on higher-level tasks and be more productive overall. This type of engagement also leads to higher levels of worker satisfaction and reduces staff turnover, which improves bottom-line costs.
A digital solution should make life easier. In the case of automation, it should streamline processes that when done manually are time-consuming and repetitive. Much automation is far more accurate than the work that a person could do simply by the quantity of data and analysis alone.
Inconsistent and Error-Prone Procedures
Humans make mistakes. Data entry is notoriously riddled with errors. According to Experian, about 69% of companies believe their work is being affected by human error. However, digital transformation can change this.
Manual data entry can lead to mistakes, but integrating digital systems to take care of data entry not only improves accuracy but speeds up processes, improves communications between systems and can detect issues faster than a human might. The consistency, speed, and accuracy that data automation can add to your processes are evident in all areas, like marketing, accounting, logistics, stock recording, order tracking, and many other processes common to all businesses.
Inefficient Training
Many basic administrative tasks can be automated, but many companies choose not to take the step towards digital improvement. When new team members begin a job, they are required to acquire a large amount of knowledge to perform their duties, some of which are unnecessarily complex and manual. This can be because people are unwilling to change or invest in systems that would ease costs long term, and it can also be because of a lack of awareness.
As people move on from administration positions, they often take with them knowledge. In some cases, this knowledge is lost as it is not passed on to new recruits, not noted or assumed as known. If more work were automated, this knowledge would not be lost. New recruits would evolve into their roles faster and be more productive and efficient if duties, such as accounting, settlement, email marketing, and reporting, were automated and required only knowledge of the right commands, rather than an entire process.
Accurately Measure Results
Verifying the results of every action enables businesses to define what is working well, and what is ineffective or inefficient. The devil is in the details. Businesses that know the broken down costs of processes, the ROI of each application, and what business processes cost money. It is this data that can help businesses transform themselves from red to black.
Deep data analysis and automated reporting can help business leaders to piece together better strategies. Clearly seeing patterns and dissecting department’s activity and costs means more precise measurements that enable businesses to thrive.
Reacting To The Market
The pandemic has been a bellwether to indicate which businesses have been able to adapt to change, digitize and stay relevant. While many companies were ready and found the change easy to embrace, others floundered in their accumulated digital debt, with little choice but to fold.
Those businesses that were agile and able to pivot easily have been the same businesses that not only stayed afloat but often thrived in lockdowns and in a pandemic-stricken world.
Clearly, eCommerce was always primed to be a winner in the pandemic as people were unable to leave their homes, in some regions for months, but unexpected winners were businesses that were linked with the sharing economy, using Blot, Wolt, Deliveroo, and numerous other apps that deliver food, groceries or other items to your door. This was beneficial for 2 reasons:
- People stayed at home
- People in the lowest income were able to work
While it could be argued that these same workers were then placed in positions of vulnerability, it also aided other vulnerable groups, like the elderly, who were able to isolate and avoid contact with others.
Many businesses rushed to join these apps to ensure that their business could continue under lockdown orders, such as take away restaurants and other food providers.
Sales and Promotions as a Fix
Often when revenues drop, marketing departments are expected to ramp up promotion to attract more customers and improve visibility. This approach, when not based on data, is set to fail.
However, when data is used to find your leads, target an audience, and determine what strategy works best for your brand, the success of a campaign is far higher. A 2019 Adobe report found that 44% of marketers consider the “holistic view of customers across all interactions” a key challenge. Without this information, they use a scattergun approach and overspend on marketing that is ineffective. Trying to sell more without clear targets is counterproductive. Your marketing team needs to understand the environment to be effective. Your data could uncover key fledgling markets, identify regular buyers or exploit buying opportunities that entice people to spend more per sale.
Investing In Innovation
Your business will become inefficient fast if you refuse to update processes, exploit digital processes that are available. One struggle for workers wanting a business to update is budget concerns. Many people see innovations as a cost, not an investment.
However, it is essential that digital transformation be made a priority by all business types as
Such innovation helps to source your place in the market, and in some cases can single you out as an industry leader. Adapting to digital change requires the guidance of professional consultants who can help you understand which aspects of your business would most benefit from upgrades, and what process would be linked through a chain reaction when an automated system is introduced.
See The Problems
Oftentimes people in a company are too close to see the danger approaching. It is only when a consultant or new hire comes onboard that gaps can be clearly defined. If you want to take stock of your digital development, start by asking:
- Have your processes grown in scale, but now outpace your business value?
- Are repetitive and manual tasks slowing productivity and causing errors?
- Are you investing time training new hires on complex processes rather than imparting business knowledge?
- Is your measure of success and outcome accurate?
- Are you leading market trends?
- Is your marketing department effective in driving revenue?
- Are you investing in innovation and digitalization?
All businesses need to assess their stage of digital transformation at some point. You need an accurate assessment of your level of technical ability and advancement and a comparison with your business goals. This should form a basic part of your business plan, and needs to be reviewed on a regular basis to ensure that your business avoids falling into deep digital debt, and takes advantage of the many tools that digital transformation affords your business.
